This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Crosby Inc. has an 11 required rate of return. It does not expect to initiate dividends for 20 ... (Read 25 times)

saraeharris

  • Hero Member
  • *****
  • Posts: 546
on: Jul 10, 2018
Crosby Inc. has an 11 required rate of return. It does not expect to initiate dividends for 20 years, at which time it will pay 4.00 per share in dividends. At that time, Crosby expects its dividends to grow at 6 forever.
 
  What is an estimate of Crosby's price in 20 years (P20) if its dividend at the end of year 20 is 4.00?
  A) 34.80
  B) 55.00
  C) 57.50
  D) 84.80

Question 2

You just took out a 12,000 loan for your small business. The loan has a four year term and repayment is in the form of four equal end-of-year payments. The interest rate on the loan is 11.5.
 
  What is your total interest expense in the first year of the loan?
  A) 1,380.00
  B) 1,089.13
  C) 764.81
  D) 403.20
  E) 2,529.29


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

katara

  • Sr. Member
  • ****
  • Posts: 305
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: D
Explanation: D) We use the formula: P20 = . Inserting our values, we get:
P20 = = = 84.80.

Answer to Question 2

A


saraeharris

  • Member
  • Posts: 546
Reply 2 on: Jul 10, 2018
Great answer, keep it coming :)

nanny

  • Member
  • Posts: 313
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

More than 20 million Americans cite use of marijuana within the past 30 days, according to the National Survey on Drug Use and Health (NSDUH). More than 8 million admit to using it almost every day.

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

Vital signs (blood pressure, temperature, pulse rate, respiration rate) should be taken before any drug administration. Patients should be informed not to use tobacco or caffeine at least 30 minutes before their appointment.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Did you know?

Warfarin was developed as a consequence of the study of a strange bleeding disorder that suddenly occurred in cattle on the northern prairies of the United States in the early 1900s.

Lymphatic vessels (green) pick up excess tissue fluid, purify it in lymph nodes, and return it to th Lymphatic vessels (green) pick up excess tissue fluid, purify it in lymph nodes, and return it to th
Influence of enzyme-substrate affinity on the rate of an enzyme-catalyzed reaction. Influence of enzyme-substrate affinity on the rate of an enzyme-catalyzed reaction.
How to solve rate problems leading to fractional equations (Question 2) How to solve rate problems leading to fractional equations (Question 2)
Return to the icehouse Return to the icehouse
For each function f(x) = 6x^2 - 4, estimate the instantaneous rate of change for the given ... For each function f(x) = 6x^2 - 4, estimate the instantaneous rate of change for the given ...
For toluene (shown below), you would expect to see which m/z fragment in the mass spectrum? For toluene (shown below), you would expect to see which m/z fragment in the mass spectrum?
Video: Stress and Immune System Animation

For a complete list of videos, visit our video library